How Property Taxes Affect Retirement in the Pointes
When people think about retirement planning, they focus on portfolios.
They rarely focus on property taxes.
In Grosse Pointe and the surrounding Pointes, that’s a mistake.
Because for many retirees here, property taxes are one of the largest fixed expenses they will carry for the rest of their lives.
And unlike discretionary spending, they don’t flex easily.
The Hidden Line Item
It’s common in the Pointes to see annual property taxes in the range of:
$12,000
$18,000
$25,000
Sometimes higher for lakefront or larger homes
That’s before:
Insurance
Maintenance
Utilities
Landscaping
Snow removal
For a retired household generating $200,000–$300,000 per year from a portfolio, $20,000+ in property taxes alone is not trivial.
It’s a permanent line item.
Retirement Changes the Math
During working years, property taxes are absorbed by earned income.
In retirement, they are funded by withdrawals.
That means:
Every dollar of property tax must come from portfolio distributions.
Which means:
Property taxes are indirectly subject to market performance.
If the portfolio drops 20%, the tax bill does not drop 20%.
It remains the same.
That’s where structure matters.
The Second Home Layer
Many families in Grosse Pointe also maintain:
A lake home up north
A Florida condo
Or both
Now you’re not talking about one property tax bill.
You’re talking about two.
Or potentially two sets of:
Taxes
Insurance
Ongoing maintenance
That’s lifestyle.
But it’s also fixed overhead.
Retirement planning must account for that explicitly.
The Emotional Component
Homes in the Pointes are rarely just assets.
They’re identity.
They’re legacy.
They’re where holidays happen.
Which makes downsizing emotionally complicated.
But here’s the hard truth:
For some retirees, the house becomes the largest risk exposure in the plan.
Not because it’s unaffordable today.
But because it reduces flexibility long term.
Inflation and Tax Growth
Property taxes rarely move downward.
Over decades, even modest increases compound.
Healthcare costs rise.
Maintenance rises.
Insurance rises.
If your portfolio is positioned too conservatively, inflation quietly eats away at flexibility.
At $2M–$8M portfolios, this matters.
This is not unlimited wealth.
It’s strong, but finite.
What Proper Planning Looks Like
When I design retirement plans for families in the Pointes, property taxes are not an afterthought.
They are stress-tested.
We ask:
What happens if taxes rise 3% annually for 20 years?
What happens if one spouse passes and income drops?
What happens if markets decline early in retirement?
The house stays.
The tax bill stays.
The question is whether the income system absorbs it comfortably.
Guardrails and Fixed Overhead
This is where a guardrails-based distribution system matters.
If spending needs to adjust during downturns, we want flexibility in discretionary areas.
Property taxes are not discretionary.
Travel can adjust.
Gifting can adjust.
Dining can adjust.
Property taxes cannot.
That reality should shape the structure of the portfolio.
The Quiet Risk
The quiet risk in Grosse Pointe retirement planning isn’t market volatility.
It’s fixed lifestyle overhead combined with inflation.
A beautiful home with rising taxes and maintenance costs can slowly pressure a portfolio if income isn’t designed properly.
That doesn’t mean you sell.
It means you plan intentionally.
The Bottom Line
Retirement in Grosse Pointe is not just about portfolio size.
It’s about alignment between:
Portfolio income
Fixed property costs
Lifestyle expectations
Long-term inflation
Property taxes are not glamorous.
But they are structural.
Ignore them, and retirement becomes tighter over time.
Account for them properly, and your home remains what it should be:
A place to live.
Not a source of financial pressure.
